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In 2020, media companies cant avoid streaming. Yet territorial battles mean that investors should expect ongoing conflict between platforms and programmers, says LightShed.

As cord-cutting accelerates, major media companies need to have direct-to-consumer (DTC) apps, analyst Richard Greenfield writes. But in many cases, theyve waited too long to do so, and now find that theyre pitted against far larger and more powerful tech companies.

That means that platforms including TV operating system and devices are facing off against apps, and this newly emerging battle is the single most important issue we are focused on in media today. For instance, while HBO Max launched in May, consumers still cant get it on Roku (ticker: ROKU) or Amazon.coms (AMZN) Fire TV platforms. Likewise, Peacockthe streaming division of Comcasts (CMCSA) NBCUniversal divisionis just days from its national launch, and will likely do so without Roku or Fire TV apps too.

The stakes couldnt be higher, argues Greenfield, as the company that has been able to claim the dominant operating system has historically reaped the lions share of the rewards, as Microsoft (MSFT) did with personal computing, and Apple (AAPL) and Alphabets (GOOGL) Google did with mobile computing. The failure of cable and satellite companies to adjust has left an opening, he argues, for some company to become the dominant global operating system for TVs globally.

If you control the TV OS platform, you can advantage your native apps relative to third-party competitors (think Roku Channel to Prime Video/Prime Music/IMDB.TV to Apple Music/Apple TV/Apple Arcade to YouTube/YouTube TV/Stadia) and leverage learnings from usage of competitive apps on the platform, he writes. You can also collect data and create an interdependent home ecosystem of products, enhanced by artificial intelligence. You quickly realize just how important it is to be a winner in the TV OS battle.

No wonder then, that big tech companies like Apple, Google, and Amazon are so eager to make their mark in the space, along with more media-focused rivals like Roku and Netflix (NFLX).

So who will win this prize? Its too early to tell, Greenfield says. Many times weve seen single-purpose companies win, which would point to contenders like Roku. However, much like cable TV, which bundled in broadband and phone to increase stickiness and reduce churn, we wonder if the ultimate TV OS winners will be large tech platforms that offer far more than streaming video. Time will tell, but this is a battle everyone should be watching keenly.

Write to Teresa Rivas at teresa.rivas@barrons.com

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The Streaming Wars Could Become a Battle of Tech Giants. Heres Why. - Barron's